Investor Presentaiton
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE STATEMENT
KONE'S GENERAL GOVERNANCE
PRINCIPLES
The duties and responsibilities of KONE Corporation's various
governing bodies are determined by Finnish law and KONE's
corporate governance principles. KONE complies with the
Finnish Corporate Governance Code 2020 published by the
Securities Market Association, with the exception of
recommendations 17 (Independence of the company of the
members of the remuneration committee) and 18
(Independence of the company of the members of the
nomination committee). The entire Code is available on the
Internet at www.cgfinland.fi. These exceptions are due to the
company's ownership structure. The company's largest
shareholder, Antti Herlin, controls 62 percent of the
company's voting rights and 23 percent of its shares. The
significant entrepreneurial risk associated with ownership is
considered to justify the main shareholder serving as the
Chairman of the Board of Directors and of its Nomination and
Compensation Committee and, in this capacity, overseeing
the shareholders' interests.
KONE's administrative bodies and officers with the
greatest decision-making power are the General Meeting of
Shareholders, the Board of Directors of KONE Corporation,
the Chairman of the Board and the President and CEO. At the
Annual General Meeting of Shareholders, the shareholders
approve the consolidated financial statements, decide on the
distribution of profits, select the members of the Board of
Directors and the auditors and determine their compensation.
KONE Corporation's Annual General Meeting is convened
by the Board of Directors. According to the Articles of
Association, the Annual General Meeting of Shareholders
shall be held within three months of the closing of the financial
year on a date decided by the Board of Directors.
BOARD OF DIRECTORS
Duties and responsibilities
The Board of Directors' duties and responsibilities are defined
primarily by the Articles of Association and the Finnish Limited
Liability Companies' Act. The Board's duties include:
compiling of the Board of Directors' report, interim
reports and financial statements
ensuring the proper organization and surveillance of
the accounting and asset management
preparation of proposals for the General Meeting and
the convocation of the General Meetings
approval and confirmation of strategic guidelines and
the principles of risk management
ratification of annual budget and plans
possible appointment of a full-time Chairman of the
Board, executive Vice Chairman of the Board and a
President and CEO, and decisions on the terms and
conditions of their employment
decisions on the company's corporate structure
decisions on major acquisitions and investments
decisions on other matters falling under the Board's
responsibility by law
The Board has created rules of procedure stipulating the
duties of the Board, its Chairman and its Committees. The
Board of Directors holds six regular meetings a year and
additional meetings as required. The Board of Directors
reviews its own performance and procedures once a year.
Members of the Board
The Annual General Meeting elects five to ten members and
no more than three deputy members to the Board of Directors
for one year at a time in accordance with KONE Corporation's
Articles of Association. The Board of Directors elects a
Chairman and Vice Chairman among its members. The
proposals for Board members are prepared by the Nomination
and Compensation Committee and under the steering of the
Chairman of the Board. During the preparation and in the
proposal to the General Meeting of Shareholders, attention is
paid to the board candidates' broad and mutually
complementary background, experience, expertise, age,
gender and views of both KONE's business and other
businesses so that the diversity of the board supports KONE's
business and its future in the best available way. The
independence of the members of the Board is assessed in
line with the independence criteria of the Finnish Corporate
Governance Code.
Committees
The Board of Directors has appointed two committees
consisting of its members: the Audit Committee and the
Nomination and Compensation Committee. The Board has
confirmed rules of procedure for both Committees. The
Secretary to the Board acts as the Secretary of both
Committees.
The Audit Committee monitors the Group's financial
situation and supervises reporting related to the financial
statements and interim reports. The Audit Committee monitors
and assesses the adequacy and appropriateness of KONE's
internal control and risk management, as well as the
adherence to rules and regulations. It also monitors and
evaluates how agreements and other transactions between
the company and its related parties meet the requirements
relating to ordinary business operations and general market
terms and monitors and oversees the financial statement and
financial reporting process. In addition, the Audit Committee
processes the description of the main features of the internal
control and risk management systems pertaining to the
financial reporting process included in the company's
corporate governance statement. It also deals with the
Corporation's internal audit plans and reports. The Head of
Assurance reports the internal audit results to the Committee.
The Audit Committee evaluates the auditing of the Group's
companies and the appropriateness of the related
arrangements and auditing services and considers the
auditors' reports. Furthermore, the Committee formulates a
proposal to the Annual General Meeting regarding the
auditors to be selected for the Corporation.
The Nomination and Compensation Committee prepares
proposals to be made to the Annual General Meeting
regarding the nomination of Board members and their
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